This IDC study examines the market for financial applications software that is growing at a solid pace (at a CAGR of 5.1%, it's expected to reach $28.5 billion by 2021), driven in part by the demand for public cloud offerings, new accounting standards, desire among end users for more configurability and innovation, changing workforce, and the rise of artificial intelligence. It is important to note that while cloud gets a lot of buzz and is growing rapidly, currently about 70% of the market is still on-premises. This reluctance to move to the cloud is partly due to information management regulations/restrictions in certain industries like government, aerospace and defense, or healthcare. Also, there is often an unwillingness from some end users to uproot their entrenched on-premises solutions, specifically if their contract expiration is quite a few years out.
"As financial operations continue to become more complex because of regulatory requirements, end users need financial applications to become much more than a repository for data. They want their financial application vendors to become more like trusted business partners — providing assistance, guidance, and advice. To that end, technology vendors are rushing to add artificial intelligence, natural language processing, machine learning, and blockchain to fulfill end-user demand and create the ultimate experience," says Kevin M. Permenter, senior research analyst, Enterprise Applications and Digital Commerce.